Retailers, transportation specialists, restaurants, catering companies – so many businesses are gearing up for the season right now and hiring temporary workers to help meet holiday demand. As hectic as it can be around the holidays, it is important to keep labor practices in mind when hiring, training, and managing part time employees. Here are some guidelines:
Independent contractors or employees?
It’s sometimes difficult to know how to classify a part-time worker. A simple guideline to follow is: An independent contractor is a self-employed worker who is providing a service to you, and is largely unsupervised while they work. You pay their invoices, but you are not responsible for their payroll taxes. You do report their income to the IRS if it’s more than $600.
An employee – even a part-time seasonal employee – should be added to the payroll. Payroll employees are supervised by you, follow a schedule that you dictate, and are assigned to work in certain areas in your workplace (a desk, or a section of your store, for example.) Consult the Small Business Administration’s helpful guidelines on W-2 vs 1099 employees for additional information.
As employees on your payroll, part-time seasonal workers receive the same benefits as regular employees do, including unemployment benefits, social security and Medicare, worker’s compensation.
As the employer, you’re liable
Seasonal employees are with you for a short time, but they are still governed by the same rules that apply to full-time employees. They’re allowed the same amount of breaks, and are subject to guidelines for overtime that apply to full-time employees. Additionally, they are covered under the same guidelines for discrimination and other employment practices liability as any other employee. All of these guidelines are outlined by the United State Department of Labor under the Fair Labor Standards Act.
Short-term employees are under the gun to learn quickly and start working right away, but don’t skimp on training, especially if they’ll be operating any kind of equipment or doing strenuous work that could lead to injury. Train them carefully and make sure they’re up to the task.
You’ll also want to check with your insurance provider to make sure you have the right kind of coverage for added employees. Your insurance provider can add additional coverage if needed.
Tis the seasonal
As you consider the seasonality of your business, work with your insurance provider to make sure you’re covered throughout the year. Ask about any types of coverage you should add, or how you might be able to avoid paying too much for coverage that’s only needed once or twice a year.
Some companies are completely dependent on seasonal employees and just a few weeks during the holiday shopping season can make or break an entire year. It’s really important to be sure you’re covered for those few critical weeks.
So, make your plans, talk with your broker, and get your holiday workforce trained and ready. And if you’re still worried about the risks you face with seasonal employees, then think about how an enterprise risk captive could help you – call us if we can help.